CPPIB, Alberta Plan Invest Nearly $2 Billion in BAI Communications

The Canada Pension Plan Investment Board (CPPIB) and Alberta Investment Management Corporation (AIMCo) have made a $1.9 billion (C$2.4 billion) follow-up investment into telecommunications infrastructure firm BAI Communications, just as it’s expanding its 5G rollout capabilities.

On Monday, BAI disclosed that it has acquired Mobilitie, the largest privately held telecommunications infrastructure company in the US, which also supplies 5G connectivity. The purchase of the California-based firm will allow BAI to expand coast to coast in the US. BAI already operates several large wireless infrastructure projects in the country, notably in the New York City subway system.

BAI has also recently partnered with Transport for London (TfL), a government body in the greater London area in the UK. The London Underground is expected to get full phone coverage by 2024, thanks to the partnership with BAI. A fiber optic network to support the 4G and 5G connectivity throughout the city’s homes and businesses is also forthcoming.

“We continue to see strong potential in BAI Communications’ vision,” Scott Lawrence, managing director and head of infrastructure at CPPIB, said in a statement. “The acquisition of Mobilitie and establishment of a long-term partnership with TfL represent attractive opportunities for CPP Investments to increase its financial commitment to BAI and the digital infrastructure sector more broadly.”

The deepening commitment by CPPIB and AIMCo will allow the Australia-based BAI to expand its business globally. CPPIB has been investing in BAI for more than a decade, since which the firm has expanded to the US, Canada, Hong Kong, and the UK.

The allocator, with US$402.8 billion (C$497.2 billion) in assets, is a majority shareholder, with an 86% stake in the company. AIMCo, with US$104.5 billion (C$129 billion) in assets, is a minority stakeholder in the firm.

Interest in telecommunications infrastructure has grown with the global onset of 5G. The faster connectivity speed is expected to remake whole industries, including by supporting autonomous driving, smart homes, the storage and sharing of personal data, as well as the advancement of artificial intelligence (AI).

Spending in telecommunication services is expected to grow by about 1% this year, after the pandemic purportedly curtailed spending last year, according to data firm Statista.